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Rate of return or target pricing method
Under this method of price determination first of all a rate of return desired by the enterprises on the amount of profit capital invested by it is determined. The amount of profit desired by the enterprises is calculated on the basis of the rate of return. This rate of return amount of profit is added to the cost of production of the product and thus the price per unit of the product is determined. This method of price determination can be used by an enterprise to get a certain return on invested capital. The use of this method is possible only when there is no competition in the market.
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Graphic method of break even analysis or break even chart The break even point can also be computed graphically. A break even chart is a graphical representation of marginal co
Problem: Fancy Foods Ltd uses a standard costing system to control its material and labour costs. The standard costs for January 2007 were as follows. Standard Costs Materi
THEORY OF METAGAMES This theory appears to describe how most people play non-zero sum games involving any number of persons. Prisoner's dilemma is an example of this; the ai
Capital gearing ratio The term capital gearing is used to describe the relation ship between equity share capital including reserves and surplus to preference share capital a
Problem 1 Management accounting is sensitive to management needs; however, it assists the management and does not replace it. Write down in detail the scope of management accou
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What is period cost Period costs are those costs which are reported as expanses of the period in question. These are cost which are not assigned to the product but are charged
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Techniques of CVP Analysis The CVP analysis deals with the price costs structure and the sales volume and identifies the profit figure with one or other combination of these
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